5 Things Energy Transfer Partners LP Wants You to Know About Its Future Direction
While pipeline and processing company Energy Transfer Partners (NYSE: ETP) has endured a tough couple of years, it appeared to have turned the corner last quarter. Not only did earnings and cash flow head higher but one of its largest (and most controversial) projects entered service and is now generating cash flow. While the company still has lots of work ahead of it, management believes it's heading in the right direction. That was evident from the comments they made on the accompanying conference call, where they detailed five points that suggest better days lie ahead for investors.
CFO Tom Long led off the call with a brief strategic update. First, he noted that the company signed an agreement to sell a minority interest in its Rover pipeline project to funds managed by Blackstone (NYSE: BX) for $1.57 billion. That's a significant deal for this equally controversial project because it shows Blackstone's faith in both Energy Transfer Partners and this project. Furthermore, as Long notes, the transaction is crucial from a financial standpoint:
After the closing date, Blackstone will contribute specified amounts of Rover's future construction cost and will also make certain additional payments to ETP. Immediately upon closing, we plan to use the proceeds to pay down debt; therefore, reducing our leverage and to help fund future growth projects.
Source: Fool.com
